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Welcome to the Mindful Fire Podcast, a show about crafting a life you love and making work optional using the tools of mindfulness, envisioning, and financial independence. I'm your host, Adam Kwayo, and I'm so glad you're here. Each episode of the Mindful Fire Podcast explores these three tools through teachings, guided meditations, and inspiring interviews with people actually living them to craft a life they love.

At its core, mindful fire is about creating more awareness and choice in your life. Mindfulness helps you develop self-awareness to know yourself better and what's most important to you by practicing a kind, curious awareness. Envisioning is all about choosing to think big about your life and putting the power of your predicting brain to work to create the life you dream of.

And financial independence brings awareness and choice to your financial life, empowering you to make your vision a reality by getting your money sorted out and ultimately making work optional. And here's the best part. You don't have to wait until you reach financial independence to live out your vision. Mindful Fire is about using these tools to craft that life now on the path to financial independence and beyond.

If you're ready to start your Mindful Fire journey, go to mindfulfire.org and download my free envisioning guide. In just 10 minutes, this guide will help you craft a clear and inspiring vision for your life. Again, you can download it for free at mindfulfire.org. Let's jump into today's episode. ♪

JL, welcome back to the Mindful Fire podcast. I'm so thrilled to have you here. Hey, Adam, it's a pleasure to be back. Thanks for having me again. Yeah, it's really exciting to have you back to talk about the updated version that you just released of the Simple Path to Wealth.

Before we jump into that, I would love to just start by having you share, you know, what's been going on in your life since we last spoke. The last episode came out two or three weeks ago from the time we're recording this now, but we recorded it back in July. So a lot has changed in my life since then, but wanted to hear a little bit about what's been going on in your world since then.

Well, that kind of leads us into the new edition of the Simple Bath of Wealth because that's what's occupied most of my time since then. I acquired earlier last year, I acquired an agent, which I hadn't had before.

And trying to figure out what to do with my three published books already as I'm getting older and thinking about my estate and passing things on and making things as simple as possible for my daughter. And so we shopped a lot of ideas around to five different publishers.

My intention actually at that point was not to redo the book, but my daughter, Jessica, got involved in the process because they said to her, you know, whatever I decide is going to affect me for about a decade, it's going to affect you for half a century. So you may want to participate in the process. And to my amazement, I knew she was on the simple path to wealth because we share numbers and I could see that

that her wealth was building and she was, you know, had a few money and well on the way to being financially independent. But I didn't really understand the depth to which she understood the work. To my amazement, she said, you know, I want to see this book continue and I want to be part of it. I want to be the shepherd of it when you no longer are. I think we ought to do a new edition. And we had a publisher,

who had that same vision. Madeline McIntosh, who's the president of Authors' Equity, and Jessica and myself undertook the project of creating the new edition. So that's what's occupied me since we last talked.

Very cool. And I know you're now on the, on the circuit, so to speak. We're thrilled to, that you took some time to be with us here today. Yeah, I can see you've got the, your copy sitting next to you, which I appreciate. Yeah. So the book itself is done. It's printed and it's being shipped out to all the different locations. So that heavy lifting, which was much more than I'd bargained for candidly, that part's done. And now this is the fun part is, you know, hanging out with, with you guys and talking about it.

Yeah, very cool. Well, I'm excited to dive into that. But just for the audience, you know, last time we spoke with JL, I was in the middle of a masterclass in the power of FU money. A lot has changed since we last recorded. I actually retired early from Google in September. And so I'm about seven months in now to this quote unquote

early retired life. I'd say semi-retired because I am building my business, doing corporate workshops and potentially doing my group coaching program again soon. So there's things that I'm doing and I'm finding that I'm getting into a nice rhythm and routine with the business and just life in general. I found like the first few months were really untangling that masterclass in FU money. But boy, was that a lesson of just

How much power and confidence having money in the bank gives you, right? So just to touch on the situation and a high level for the audience. I had a manager that decided they wanted to come after me, build a case against me and try to get me pushed out of the company. And I learned that.

Companies are set up to support the managers to do those things when they need to. Unfortunately, they can do whatever they want. This person was coming after me and I...

Immediately, when it was presented with you take severance or you go on a performance plan, I was in a position where I was, you know, one, I was extremely taken aback and kind of blindsided by the situation. Knowing I had money in the bank made me bold and I went right on the offensive. I was able to stand up for myself. I was able to navigate the situation with a level of resilience that, frankly, I didn't even know that I had.

And a lot of that came from knowing that I didn't need the money, knowing that I had money in the bank, that I'd be able to put food on the table for my family. I just was able to stand up for myself and pursue and finish the things that I wanted to finish before ultimately exiting Google and moving into this next chapter of my life.

And while it was an extremely difficult situation, I am very proud of how I handled it. Very proud of, you know, having been on the simple path to wealth, built up this wealth, built up this FU money so that I could navigate this with.

without, um, freaking out and compromising my integrity and all of these things that can happen if you need the money. And so just wanted to share, you know, kind of one that update about my life that I'm now actually in this early retirement period. And also just thank you for writing the book because it allowed me to be

in the position where I had FU money and I didn't need their salary. I certainly didn't need the small amount of severance they were offering me in exchange for signing away all my rights. I was able to navigate that situation and move into the next chapter with confidence and clarity and momentum. So thank you for writing the book and excited to get into what's new.

Yeah. So congratulations, man. That's awesome. And it's also a lot of these conversations and people will say to me, you know, becoming financially independent sounds great.

but it's so much deprivation. I have to take this chunk of money that I'm earning and instead of spending it on stuff I want, I got to invest it. I got to save it. And that just feels like deprivation. And my reaction to that is it doesn't feel like deprivation to me at all. What it is, is you are choosing what's most important. What's the most important thing your money can buy for you? For me, and obviously for you, the choice was your freedom, your financial freedom.

And you buy that. It's not deprivation at all. It's a choice of selecting what's important to you. You buy that, of course, by buying assets that you invested. And that allows you to be in the position you just described. And I would be willing to bet an enormous amount of money that's sitting here right now. If anybody were to ask you, what's the most valuable thing you've ever bought with your money? Your answer would be my financial freedom.

And I think that's something that I strive to get more people to understand because I don't think most people are ever going to follow the simple path to wealth.

Because we live in this very consumerist society that there's always a drumbeat of, you know, if you buy this thing or that thing, your life will be better. You know, the opposite sex will find you more attractive. You deserve a break today. All this stuff, the most fundamental desirable thing you can buy, in my opinion, is rarely mentioned.

Frankly, when it is mentioned, a lot of people don't want to make that choice. They'd rather buy what I call the trinkets and trash. And hey, it's their life. It's their money. You can do whatever you want to do. I think the real tragedy, by the way, would be to get in a situation like yours, having not done this.

but also having not realized it was even an option, which is one of the reasons I do this interview and I've written the book and just revised it. But at least now, anybody who's listening to us, they may choose not to follow the simple path, and that's your life. It's your choice. But at least you know it was an option that was available.

Final thing I'll say on that is you're a great illustration of what I'm always saying to people. It's an uncertain world we live in. And when I hear people say, well, yeah, that sounds great, but I love my job. I've got a great boss. They love me. You know, I'm not at all worried about that. That can change as it did for you on the turn of a dime.

Your boss can change. Then suddenly it's not a boss who loves you or that you necessarily love, and that can profoundly change whether or not you want to continue to work there. This doesn't apply to Google, of course, but the company itself could fall on hard times, and they might love you and still have to cut you loose. It's an uncertain world, and going through life assuming that that job will always be there for you, that paycheck will always be there for you,

Seems to me kind of a version of insanity. And by the way, this is not new thinking. You can go back in the Bible and the Bible talks about, you know, you'll have seven years of feast and seven years of famine. So during the seven years of good times, you store grain. I mean, these are not new concepts, but for some reason, large number of people in our culture don't see the need to store that grain.

Yeah, it's so true. I mean, there are so many forces hitting the drumbeat of spend your money, spend everything you earn. But I was in this situation where I loved my job. I love the company. I love the boss. And.

Then they decided to change some things around and I got moved over to a new area and I got a new boss and then I got another new boss. And suddenly I'm with someone who is not someone that loves me and who I love and has other ideas. And they decided they wanted to push me out and there was very little I could do. I describe it as a slide. Once someone decides to put you on the slide in one of these big companies, they're

The end of the slide is out the door. And if you've been living paycheck to paycheck, having a very expensive life, as many people who work for these big tech companies out in the Bay Area do, just by the necessity of living in the Bay Area because it's expensive.

You are one bad manager away from a rude awakening. And this was a rude awakening for me. And I had the financial independence and financial, you know, FU money to be able to weather it. It was extremely stressful. And I can only imagine the level of stress and anxiety and fear that people will feel

if they don't have that. So buying your freedom, buying your security is the most important investment that we could make, in my opinion. In my opinion as well. And years ago, there was a guy named Andy Rooney. He's now passed away, but he used to do a final commentary on 60 Minutes, if I remember correctly. He was kind of a curmudgeonly old guy, and he had a great line one time. He said, don't expect too much from your company.

even if it's a good company. And that's a profound statement. And I, you know, you see people when there's a recession, for instance, typically, you know, the news will have some guy typically in his mid forties, he's just been laid off. He'll be saying something like, I gave 25 years to this company and now they laid me off. And

I'm about to lose my house. I listened to that. I think, wait a second, you had a management job for 25 years and you're months away from losing your house because your paycheck stopped. What were you thinking? And clearly what that person was thinking, given the commentary is the company has an obligation to continue to employ him. It doesn't.

Just like you don't have an obligation to continue to work for any given company, you have the freedom to leave whenever you want to leave. The company has the freedom to keep employing you or not keep employing you. And there's nothing at all wrong with that other than a misplaced expectation. I mean, I've said to people, and sometimes it's a harsh lesson, what is it you think the company owes you?

Did you do the job the company hired you for? Yes, I did. Okay. Did the company pay you the agreed amount of money for doing that job? Yes, they did. Did the company provide the agreed benefits that they said they would provide you? Yes, they did.

The company has fulfilled its obligation to you and you have fulfilled your obligation to the company. So you're both free to go your separate ways. This is not something that it seems to me is difficult to understand, but it does seem to be something that occurs to far too few people.

So true. Well, so let's switch gears now, JL, into talking about the new edition of The Simple Path to Wealth. For that, I want to hand it over to Chris, my podcast producer, who joined me on the episode where I announced my early retirement from Google, where we got into the details. Welcome back to the podcast, Chris. Always behind the scenes, but it's great to have you on the interview today. And I'm excited for you to ask JL some questions about the new edition of The Simple Path to Wealth.

Yeah, it's fun to meet you, Chris. Yeah, it's nice to meet you, JL. And thanks for inviting me, Adam. So jumping into Simple Path to Wealth.

I know the first edition came out back in 2016, almost a decade ago. Right. And I have read it many times. I know most of our audience has probably read it. And I think most of us consider that first edition a classic. I mean, so there's nothing to improve on. So it stands a test of time, stands alone. I think we're all just curious about,

You talked about earlier, your daughter, Jessica, wanted to be involved and help shepherd the book forward into the future. Beyond that, were there any specific reasons that you wanted to revise the book? Perhaps any loose ends you wanted to tie up in the last edition or maybe addressing recent changes in the market in the past decade or any investor preferences? And also maybe what is included in the new version that we can look forward to?

Let me start by sharing a story with you based on your comment, your very kind comment that, you know, it's a classic that didn't need to be revised.

So I want to say it was back in January when I was in the middle of the process of updating and doing all these changes and editing and edits, and it turned out to be a much more onerous task than I had ever anticipated. In fact, if I'd known how big a task it was going to be, I don't think I would have done it. But anyway, in the middle of January, when I'm in the depths of this kind of miserable part of the project,

I'm talking to a friend of mine. At this point, it was kind of hush-hush that I was doing this. So he didn't know. And at one point in the conversation, he kind of said what you said. He said, you know, JL, the great thing about the simple path to wealth is you're never going to have to update it. It's timeless. And I didn't say anything during the time, but I'm thinking, by all that's holy, what am I doing here? Because he's right. Why am I putting myself through this misery?

But I'm glad I did because ultimately the new edition is, I think, a better book. First thing I would say is

that if you have read the original edition, which by the way was fundamentally the writing was finished in 2015. So there's a decade, even though 2016 was the publishing of it. So one of the reasons that I wanted to do this at this juncture was a decade's a nice round amount of time. And first book was based on looking back 40 years, which was

The time horizon of when I began investing, which was the first year I invested and bought a stock, was 1975. So to 2015, you're looking at this 40-year period. And I was curious now, of course, it's a 50-year period as to what it looked like half a century later. So the fundamental philosophy in The Simple Path to Wealth is unchanged.

So if you read The Simple Path to Well, the original, and you're on that path, candidly, you don't need to read the new edition. You might enjoy reading it because there's a lot of interesting new material in it. But there is nothing that is fundamentally changed in the approach that I recommend or what The Simple Path looks like.

What is there? Well, we went through and updated all of the numbers, all of the what-if analysis numbers we looked at. One of the more interesting things, by the way, is back when I was doing the original book, I thought, you know, I ought to look at just how has the S&P done over this 40-year period.

And by the way, 1975 is also coincidentally the year that Jack Bogle created the first index fund, an S&P 500 index fund. And kind of to my amazement, when I looked up those numbers over 40 years, it had gone up on average 11.9% a year.

just under 12%. And that's a stunning number. And that was not a number that I felt comfortable, and I still don't, suggesting anybody can rely on. But yet, nevertheless, that was the number. That 40-year period was not some golden age. We had the lost decade from 2009. We had Black Monday, the worst

One day crash in history, worse than anything in the Depression back in 87, we had stagflation. So it was a pretty, pretty rugged time period. So that's an indication of just how powerful wealth building tool is, the stock market is. But I was very careful in the original book, if you look at it, and again, in the new edition, by the way,

to say, you know, you should not do your planning based on expecting this level of return. So when I was working on the new edition, I thought, well, let's rerun these numbers. And of course, most people listening to us are familiar that this past decade has not been a cakewalk either. Well, it turns out over that 50-year period is now up to 12.2%.

What's really striking to me about that is back when I first published The Simple Path to Wealth, most of the smart guys on Wall Street were saying, you know, the market's done really well for the next decade, meaning the past 10 years for us now. You can't expect these kind of level returns. You have to kind of figure maybe 4%.

annual returns. Well, here we are. I mean, it did considerably better than 4% to pull that 50-year average up. So that was a little stunning. I still say you don't count on that going forward. You do have decades like from 2000 to 2009, 2010, where the market returned, I think, like a negative 0.63% or something. There can be long extended periods of time like there were in the 70s

where the market goes nowhere. And of course, it's always going to be very volatile. But over time, it is richly rewarding. All of those numbers are updated. There's a new case study in the book, my absolute favorite, about my friend Tom, who at the age of 62 found everything in his life financially just went down the toilet. He'd had a couple of divorces. He lost his house. He went bankrupt.

He was an advertising executive at an age where he was unemployable, and he had nothing. I mean, he had a small pension from one of the companies he'd worked for for a while, and at 62, he took his Social Security, which is the earliest you can take it. It also, of course, means that you get less money. In spite of all that, Tom has a great life. Tom is probably the happiest person

individual I have ever known personally. And I was asked in another interview, by the way, and this kind of surprised me, but

maybe it shouldn't have if Tom was a real person. And yes, Tom is a real person. He used to be a client of mine back in the 90s, which is how I know him. And then let's see what else is new in the book. There's a section at the end called Toolbox. One of my favorite parts of that section is the FAQ, because I have gotten a lot of questions over that 10-year period about all kinds of different things. And

Some of the FAQ questions, I think you've read the book, you'll see I actually can refer to sections in the book that answer it. But some for a variety of reasons, like how I feel about cryptocurrency, didn't feel like it belonged in the book, but it was a good thing in the FAQ section. That's there. One of the key questions, by the way, is, so is the simple path still valid? And I think

I mean, I understand the concern behind that question, but it always kind of makes me laugh a little bit because the simple path to wealth is a path that you're going to follow for decades. The idea that something in the near term is going to change that philosophy is, I mean, it's just not designed that way. It expects the kind of volatility that we're experiencing at the moment, for instance. That's just part of the process.

so i think i prattled long enough hopefully i answered your question i was very fortunate to get an advanced copy and you know the original edition stands up on its own but it's also great to see these updates

And I think especially for the new readers, too, who have not read the book, this would be a good jumping-off point to get to know your strategy and your concepts. You know, it's an interesting point along those lines. And one of the reasons that I went with a publisher this time, because I was self-published before. So The Simple Path to Wealth, the original edition, has been enormously successful, but I think mostly in the FI community, you know, the financial independence community.

I am hopeful that with the marketing and distribution reach of my new publishers, that it'll reach beyond just that community. So it will become much more readily available in bookstores, for instance, where somebody who's maybe never heard of financial independence will have the opportunity to stumble upon it and say, hey, maybe this is interesting and I'll give this a look.

The title certainly is helpful for that. You know, if you see this in the bookstore next to a bunch of books about like stock market and this and that, it's like, oh, yeah, I'm going to read this one, the simple one. So hopefully I think that's a really good point. Anyone who comes across the fire movement is going to come across your book. Whoever they talk to is going to recommend it. They're going to hear you on Facebook.

Choose FI, Paula Pan, any of these podcasts that you've been a guest on. But anyone who hasn't come across financial independence, which, as you said, is most people, you know, now they have a chance where your publisher is going to get it in front of them in a bookstore, in an airport or various places. And I think that's so important because the more people that follow this, you know, the more people that can have freedom and create the life that they want.

or at least be aware of the opportunity. You know, I have to share a story with you about the title of the book, if you'll indulge me. I spent three years writing the original edition, and The Simple Path to Wealth was the title that occurred to me immediately, but I never liked it. And it was just, in my mind, it was just a working title, like a placeholder until I came up with something better. And I never did.

I never came up with anything that I thought was better. So when I published it, I still didn't really like the title, The Simple Path to Wealth. But I've learned I'm wrong because countless people like you very kindly did have said, you know, this is what a great title for this book. It's a perfect title for this book. You know, it's attractive. So I obviously, I'm glad I never came across with some alternative that I liked better that probably would not have actually been better. Yeah.

Yeah, it's perfect. I have one more question, JL, and this might fit better in the Q&A section, maybe jumping ahead here. But you mentioned your daughter, Jessica, throughout the book. And I know that The Simple Path to Wealth was really based out of a series of letters to her, your knowledge you wanted to pass on. So we hear about your daughter. We hear about the name Jessica. You talked about

how she was involved in updating this new edition of the book. But can you tell us more about Jessica? Can you tell us, you know, how has the book impacted her in the past decade since it came out? How is she doing nowadays? I think we're all just wanting to know more about this mysterious person. Sure. So she's not mysterious to me, of course, but Jessica likes to tease me. She says, you know, Dad, if I'd listened to you when I was young,

There'd be no blog. There would have been no Chautauquas, which were the events that I used to run. There'd be no books.

and Adam and Chris wouldn't want to interview you. And she's right. But when she was very young, because I think this stuff is so important, and like every parent, I want my kid's life to be wonderful. I want it to be rich and free with all kinds of options. I made the mistake of pushing this investment stuff way, way too hard and way too early, and I managed to turn her off to all things investing.

And I was dismayed by that. And my wife, Jane, by the way, used to say to me, you know, she's absorbing more than she lets on. And that gave me some comfort, but it sure didn't feel that way to me. So as you alluded to, I started in probably around 2010 writing a series of letters to her about this stuff.

So the information would be available in case I wasn't around by the time she was ready to hear it. And then a friend of mine said, you know, this is, I shared it with this friend of mine. He said, hey, this is pretty interesting stuff. You ought to put it on a blog and share it with your family and friends. And I'd heard of blogs before, but I'd never actually seen one. I kind of joked that the first blog post I ever read was the first one I wrote.

But it seemed to me to be a great way to archive the information. Created the blog, JLCollinsNH.com, and I started putting this stuff up as a series of blog posts. And I, by the way, I sent it to all my friends and relatives, and none of them cared. But that was okay with me because that wasn't the real purpose. But then kind of to my amazement, I began to attract an audience beyond my friends and relatives who were interested.

And that's kind of how it took off. And then the idea of the book came to when this body of information in the blog had become big and somewhat cumbersome. Well, I can distill this into a book. And I'd always kind of wanted to write a book where it is more concise, better organized. Hopefully the writing's a little better polished. And so that's how the book came to pass.

Anyway, all of this is happening while Jessica's in college. You fast forward, and she is now in her early 30s. She just, kind of like you, Adam, she just quit her corporate job last fall. I don't think she's fully financially independent yet, but she has a few money, and she got tired of what she was doing. And it was a great company. They were good to her. They liked her. She liked them. But it was just not something that spoke to her soul.

She had the financial resources to step away from it. And how long she steps away, I don't know, but that's what she's doing now. This was not planned, but the good news for me was that coincided pretty well at the time that I put together this agreement with Authors' Equity to do this new edition of the book.

And to my amazement, as I said earlier, I learned that Jessica was now keenly interested in this stuff, and she understood it at a depth that I had no idea that she had reached until we started working on the book together. So I was telling the story earlier about how onerous this rewrite was for me back in January, and that's true, but

The really joyful part of it was working with Jessica on it, seeing how engaged she was and how effective she was in coming up with these updates. It was really gratifying to me as her father. So long answer to your question. She actually finally did listen. She has been on the path ever since she got out of college and it's paid dividends and put her in the same kind of position that Adam's in. I'm enormously gratified.

By that, by the way, one last thing on that, because I asked her at one point, when did this happen? When did you start thinking differently about this? And she said, you know, when I was in college, I would hear my friends talk. They were so nervous about money issues. And so, you know, it was kind of a mystery to them. And it was kind of terrifying. She said, I thought the way I grew up hearing about this stuff all the time is the way everybody grew up.

And she said, it wasn't until I went to college that I started to realize how unique it is that none of my friends had ever heard this stuff before. So suddenly she was in the position of explaining some of these things to her friends. And as they say, the best way to learn something is to teach it. So there you go. That's awesome. Sounds like mission accomplished. Well done, sir. Well done. Mission accomplished. Yeah. Even though I didn't realize it was being accomplished at the time. Very cool.

I think that's so fantastic that you're she's hearing it the whole time. Your wife was right. She was absorbing it. They're absorbing everything for better or for worse. In this case, it was for better. And yeah, I think there's just such a going back to, you know, the purpose of working with a publisher to get it in the hands of more non-fire acolytes is so important. You know, I talked to a guy the other day, like I went to Topgolf in the middle of the week because I'm now retired. So I'm like, perfect.

And I ended up being next to this college kid. We ended up getting talking and whatever. And I asked him, you know, are you familiar with financial independence? Retire early. And he had heard of it and whatnot. But luckily, he had been taking some actions, had some investments and started thinking about it. But I just think about how powerful would it be if every person going into college or coming out of college, ideally, you know, in high school, going into college before they take on all the debt.

They know this information and they can put it to work in their life.

And by the time they're your daughter's age, early 30s, they could be doing whatever they want. What a world we would live in where people were doing this. I always had this idea of like teaching like a course to what they call nooglers at Google. Basically, just like, hey, you're now here. And a lot of those, you know, nooglers were new grads or whatever. Not always, but it's like, hey, you have all these things in.

available to you at Google to build wealth and read the simple path to wealth essentially, and start doing these things now because these are smart, motivated, talented people. And,

Let's be frank, like selling ads is probably not their life's work. And so if they can use this time at Google to build the wealth, then what could they do afterwards when they had the freedom to do whatever they want? Because work is optional. That really motivates me. And at some point I'll have a nonprofit teaching mindful fire approach to, you know, young people. But I just think that's such a powerful thing that your daughter is living.

And then I'm living, but a little bit later than your daughter. You touched on something that I think is very important. And when Jessica was in college, she came home to visit one day for Thanksgiving or whatever holiday it was. Of course, I immediately launched into lecturing her about financial stuff because I'm me and she stopped me. And she said, Dad, I get it.

I understand. I know this is important. I just don't want to have to think about it all the time. And that was an epiphany for me because it suddenly occurred to me, and I knew this intellectually, but I never really thought about it, that

I'm the odd one out. People like me who love this stuff and revel in it, we're the odd ones out. Most people, and you alluded to this to the people of Google, they're smart, they're motivated, they're highly intelligent, but they have other things to do, like build companies or bridges or cure diseases or what have you. And they know getting this financial stuff is important, but they don't want to spend their time working on it.

And the beauty of the simple path to wealth is, like my daughter, if you understand a few basic principles and you implement a couple of basic, simple strategies, you're done. You can forget about it. You put it on autopilot and it makes you rich in the background while you go off and build the company or the bridge or cure the disease or whatever, which is what my daughter did.

The beauty, I think, of the simple path to wealth, and I'm basing this not so much on my opinion, but the feedback I've gotten is people who say, you know, I've tried to understand this financial stuff for years, and I've tried to read countless books about it, but now I read the simple path to wealth, and suddenly it makes sense. Now I get it. Because I'm not writing for financial types. I'm writing for my daughter and people like my daughter, the people that you were describing at Google. That's exactly right. That was...

the epiphany for me. I had been putting it off for years. I had been thinking it was too complicated, didn't want to make the wrong decisions. Luckily, I wasn't spending all my money, but I wasn't doing what I needed to do. Then I read your book and

shout out to David Maltz who got me into this and introduced me to the book. And I was like, wait a second. I don't need $10 million to retire. I don't need infinity to retire. And I don't need to pick the winners and the losers. I can just buy it all, set it and forget it. I can do that. And then it was self-cleansed for me as it goes along. Exactly. And that was like, wow, that's so freeing and so empowering. And that's what I did. And

It worked. And here I am pretty powerful stuff. And I recommend it to people. I send it to people like I'm a big fan of getting it into more people's hands. So it's, it's really, it's powerful stuff. Okay. So let's switch gears jail, given that I'm now in this new phase of, of life in early retirement, I want to talk about withdrawal strategies and actually using the money that I've built and the wealth that I've built by following the simple path, you know, at the moment,

I am not necessarily needing to pull out money because my wife is still working, which apparently is called Wi-Fi. I have not known that, but someone told me and then I thought it was like a well-established phrase when I was talking to people at Economy or wherever I was. But apparently that's the thing where your wife is working and you're early retired. It's called Wi-Fi. My wife hates that term, but.

At the moment, that's the situation we're in. So don't necessarily need to pull out. There is a potentially a gap that we need to cover, which we would need to use some investments for. But that all depends on how much money I make with my business. I would love to hear your thoughts on, OK, your let's take an example of a person who is approaching financial independence. They're about to move into the next chapter of finance.

kind of turning off their, the faucet, so to speak, of money coming from a traditional job. What's your advice on how to think about using the money that you've built? So let me answer that with sort of two case studies, if you will, me and my daughter.

right? Because we had different situations. So I didn't come to what is the simple path to wealth until I was much older. I was wandering in the wilderness for decades figuring this out. And so for a large part of my investing career,

I was a stock picker, and by extension, I was picking actively managed mutual funds that were run by people who were stock pickers, trying to figure out which stock was going to outperform, which fund was going to outperform, blah, blah, blah. It took me an embarrassing long time to embrace the power of indexing. I mentioned earlier in the conversation, 1975, coincidentally, the year I started investing, was the year that Jack Bogle introduced indexing.

the first index fund, the S&P 500 index fund at Vanguard. I didn't know about that at the time. I frequently think, though, had I known about that and that I just invested in that fund and done nothing else for the rest of my investing career, how much wealthier I would be today. But I didn't know about it. So you can't blame yourself for things you didn't do that you didn't know about. But 10 years later, in 1985...

A friend of mine who was a financial analyst out of the University of Chicago, the University of Chicago did a lot of work on efficient markets and what have you. He was the first one who introduced me to this idea of indexing. And it just was counterintuitive to me. So I resisted it for another 10, 15 years before I... I'm a slow learner. What can I say? Anyway, all of this is a long way of saying that

When I stopped my corporate career, which was 2011, and started living on the portfolio, the first thing I did was...

To start selling off the cats and dogs that remained from that earlier life to stocks that I, if I had a loss in them, I sold them and took the loss to set aside gains. And then ones that I had gains in now, you know, your income drops so you can take those at favorable rates. And so that's how I first generated the income.

until eventually all that stuff is gone and then you're living on the index funds. So that takes us to Jessica. Jessica never made those kinds of mistakes. She started with VTSAX, which is Vanguard's Total Stock Market Index Fund, from the very beginning, as is my recommendation.

When you are in the wealth building process, when you're working and you've got earned income flowing in, you should be saving a significant part of that income to buy your freedom, and you buy it by pouring it into VTSAX on an automatic basis.

an investment that holds 3,600 roughly different companies. So well diversified, but very stock focused. So very aggressive and somewhat volatile, but you can endure that volatility. In fact, that volatility works for you

because you're putting in money every couple of weeks or a month or whatever your schedule is. So when the market's down, you're picking up those shares and bargain prices. So it's a beautiful thing. Last fall, as I mentioned, she stepped away from her corporate job. At that point is when you add bonds. It doesn't matter what age you are. She's very young, but she's now living on the portfolio. So

She and I sat down and we talked about it. And as I'm remembering, I think she decided on either a 20% or 25% allocation towards bonds in her portfolio. So at that point, she's got 75% still in VTSAX, and now she's got 25% in VBTLX, which is Vanguard's total bond market index fund. That pays a larger dividend, right?

because it's a bond fund. And I want to say like three and a half percent or something like that. So the first thing we did is calculate, okay, how much income is this bond fund going to throw off for you a year?

When she was building her wealth, she was having all of the dividends reinvested. When you're living on your money, you change that. So now she has her dividends from VTSAX going into her bank, and she has the payouts from VBTLX going into her bank. And I think VTSAX is like 1.3% or something in dividends. So we calculated that. Then we looked at how much that she wanted to have to live on.

Those two things were not quite enough, and they rarely are if you're thinking about following the 4% rule and you want to live on 4% of your income. So obviously, you know, somebody is paying, say, 3.5%, and another thing that's paying 1.3%, you're not going to be at that 4%.

So then you set up a schedule. So now you have those dividends flowing in that are picking up a pretty big portion of what you need, what you want to spend. And then you figure out what's the remaining portion and you reach out to Vanguard or whoever your brokerage company is, whoever you have your investments with and say,

I want to sell, want to have you sell a certain number of shares each month or once a quarter, whatever the schedule you decide on, and transfer that money into my bank. I think she does it quarterly. So there you go. And then that brings you up to wherever it is that you want to be. You are only selling a very small portion of your shares at any given time.

So the market is still volatile. People think, well, as the market has in recent history, when it dropped close to 20% not too long ago, oh my God, I've lost 20%. Well, only if you sell everything right now. If you're pulling out a tiny percentage over time, then yeah, you're going to be selling some shares at a lower price, but it's really not very damaging. That's kind of how the mechanics work. Is that

What you were looking for? Yes, definitely helpful. Couple follow up questions. So I guess first on the dividends piece, why use those first? Why not reinvest? Because you just you need the money. So you might as well just take that rather than paying capital gains on.

selling more shares or? Right. So in your situation where you said you don't need the money from your investments, you should continue holding your investments and having those dividends reinvested. Got it. What I'm describing is my daughter's situation. She needs the money to live on. It's like, how do your investments generate that money? They do it in two ways. They do it in dividends and interest, and they do it by selling a few shares.

But if you get to the point, let's say your wife decides she's going to retire and now there is no other income and you're living on your investment, you will want to do something along the lines of what I described. Got it. And when she switched into bonds, was that in her taxable brokerage? Were there capital gains to make that switch? It's actually a great point because.

She did have, of course, pretty substantial gains in her VTSAX over time. And so when you sell that, it is a taxable event, long-term capital gains, so not quite as onerous as

you know, the regular tax brackets, but still they can be up to 20%. Ideally, if you can do that in a tax advantaged account, like an IRA, and by the way, you should absolutely, if you're working for a company and you leave that company, roll your 401k, which hopefully you were funding into your own IRA. So you have more control.

But yeah, so she made that change in her IRA. It was not a taxable event for him. And then by the same token, when I was doing it, of course, I had all these cats and dogs as I refer to them. And some of them had losses and some of them had gains. So I sold all the ones with losses and sold as much as the ones with gains as I could to take advantage of those losses. And then I just had to pay the gains because I sold more over time. When you retire, you

your tax bracket drops dramatically because you're not earning the big money.

And investment money is taxed much more favorably than earned income. You're in a very tax advantageous position to begin with. One more question on that. So she sold like in the IRA and wouldn't those dividends be in the IRA? They are in the IRA. So you, you have to play a little bit of gamesmanship. Some of this is just a way of thinking about it. She also has a money market fund outside of the IRA along with her stock fund.

So she calculates what the amounts are, the dividends, and actually takes it out of the money market fund. Because as you point out, it's in the IRA and you don't want to pull money from an IRA. Right. You don't have to because that comes out.

It's your earned income tax bracket rate. Now, one of the other... So she's basically getting the dividends in the IRA and saying, hey, I have this money here. I'm going to take it out over here. Exactly. And it's the same. It's a wash. Right. The other thing along these same lines, which might be of interest, is if you've had a 401k and you followed my advice, you've rolled it into an IRA...

Now you have an opportunity because your earned income has dropped so low, you're in a much lower tax bracket. Now you have an opportunity to start moving that traditional IRA money into a Roth IRA at little or no taxes. So this is a little bit in the weeds and you have to look at tax brackets and all this to kind of figure it out.

But you can move significant amounts of money from your traditional to your Roth with little or no taxes when you don't have any earned income anymore because you have standard deductions and all this kind of thing to...

to play with. So there are some really interesting posts that people like the mad scientist have written about doing this. People should be aware that this is the opportunity. And then, you know, who knows? You might go back to a corporate gig. Jessica might go back to a corporate gig. At that point, you reverse all this stuff, right? You sell off the bonds, you go back into total stocks and you start

building that from your earned income again. I think it's very unlikely that you and Jessica will never make earned income again. You know, I mean, you didn't get to this position without being smart and fairly well-driven. It's also striking to me, there's a lot of fear around taking this step, and there shouldn't be, in my opinion, because first of all, if you look at the 4% withdrawal rate, which is kind of an accepted barometer, that's a very conservative number.

But number two, if you're doing this at a young age, like you and Jessica are, the idea that you're not going to make any more money for the rest of your life and you're only going to live on the portfolio. I've met an awful lot of people over the last 15 years I've been doing this in the FI community.

And there's not a single one I've met who've retired at a young age to do nothing. I don't think it's the way humans are wired, basically, let alone the kind of human that accomplishes this level of financial independence.

One other question on the kind of the timing of the withdrawals of her selling the stock to live off of, you know, assuming that I were in a situation where I was living off the portfolio that my wife stopped working and I wasn't making any income or whatever that gap difference is. Would you recommend having, I asked this question to, um,

OG from the stacking Benjamins podcast. His advice was basically have two years living expenses in cash and

front-loading those sales to have that cash buffer just in case the market drops. And he basically suggested having like a threshold. Like if the market drops more than 20%, I'm living on cash until it recovers. So you don't have to sell low to do that. But you were saying if you're taking out small pieces each time, you know, each month or each quarter, it doesn't matter too much. But what are your thoughts on having like a cash cushion to live on so you can avoid

Or you can mitigate series of returns risk. It's not my preferred approach. It's a very conservative thing to do. As I mentioned, Jessica does have a money market fund, so she does have a bit of a cash cushion. I don't think it's anywhere near two years worth of living expenses. The problem with that is that money doesn't work very hard.

And I want my money to work as hard as possible, most of my money to be working as hard as it possibly can. And that means in stocks. And I think that advice comes out of

the fear around market drops and especially market drops that last for extended periods of time. So I get that. But referring to what I'd said earlier, well, let's put some numbers on it. If you have, say, 25% in bonds and 75% in stocks and broad-based low-cost index funds, that is going to throw off

I'm going to say today about 2.5%. You're going to get 2.5% of whatever your lump sum of money where you don't have to worry about selling shares at all, period. Now, let's suppose that you need more than 2.5%. You want the full 4%. Now you have to make up another 1.5%. So the worst thing that's going to happen in any given year is you are going to sell 1.5% of your stock fund at an unattractive rate.

level. I think I'd rather endure that to have the power of growth that stocks give me in the good times, which are on average 75% of the time. The market goes up 75% of years and it goes down 25% of years. In my mind, I would rather have

Now, let's suppose you hit a really bad period like 2000, 2009, where that's essentially not going anywhere for a decade. Well, you're still not pulling out that much money. And when it turns around and comes roaring back, as it always does, you still have a large chunk of money invested in those stocks to come roaring back with it.

So I don't feel that need. You're not going to get a lot of pushback from me. If somebody is listening to this and says, well, yeah, but I just feel a whole lot more comfortable if I had two years of living expenses sitting in cash, go for it. Because there are a few things more important than being able to sleep at night. So if that lets you sleep at night, you'll get no argument from me. It's not the optimal financial thing to do in my view, but it might be the optimal psychological thing to do depending on who you are.

Got it. Got it. And isn't moving into bonds doing a little bit of that? Like they're still invested, so it's growing more than cash.

but it's not stocks, right? So you're taking a little bit of the earning power away, getting the dividends from that, but you also keep the shares you don't have to sell. Am I thinking about that correctly? You are thinking about that correctly. And the other thing, and this gets a little deeper in the weeds, which is fine. The other thing is when you're pulling the money and if the stock market's way down, you don't have to sell your stock shares. You could sell some of your bond shares.

And bonds tend to do better when stocks are down. So this year is kind of instructive because people sometimes think, well, when stocks are down, bonds should be up. And that's not necessarily true. I mean, there are bad times when they both go down together. I think 2022 was one of those bad bear market times. But a lot of times, like the beginning of this year,

Stocks went down close to 20%. Bonds also went down, I want to say maybe 3% or 4%. So they still lost ground, just not as significantly, which is a big help in preserving your wealth. You don't expect your bonds necessarily to be going up in a really bad market. You can expect them to be going down more slowly.

Gotcha. Thank you for kind of walking me through that. I appreciate the various approaches or ways to think about that. So much of the conversation about this is focused on the path to retirement, on the path to financial independence, but not necessarily about getting there and then afterwards. So definitely hope this is helpful for people. Great.

Figuring out what to do once you're there. That's kind of the fun part, right? Yeah, I guess it's a good problem to have. All right. So let's switch gears. Usually we would do the mindful fire final four, but you did that last time. So let's take some questions from the audience. This is the first time we're going to be doing this.

Really excited to bring some voices from the audience into this conversation. If you're listening to this and you want your questions answered on a future episode, you can always submit your questions at mindfulfire.org slash voicemail, or you can always just reply to my email, which you can sign up for at mindfulfire.org slash start with your question either recorded or in a written format. But let's jump into some questions. First question comes from Natalie.

Hi, JL. Thank you so much for your book, The Simple Path to Wealth. I'm Natalie, and my question is around debt. I love the premise of your book. Spend less than you earn. Invest the surplus. Avoid debt. And there's other people who also agree that we should avoid debt, like Dave Ramsey. He does not believe in credit cards.

He'd rather people use secure credit cards or debit cards or cash, which can make it a little bit tricky when you're trying to buy a home, buy a car, or rent a car. There's other people who think that there are good debt and bad debt. Good debt would be a mortgage or a reasonable car note. Bad debt would be a credit card loan. And so where do you stand with avoiding debt? Do you support people not using credit cards?

and using a secure credit card, do you think there is good debt and bad debt? Thank you so much. Oh, thanks for the question, Natalie. That's actually two questions. Let's start with a credit card question. I think credit cards are kind of like chainsaws. They're extremely useful and powerful tools and extremely dangerous.

So if you're going to use a chainsaw and you need a chainsaw for whatever reason, there's probably nothing else that can do that job as quickly and as effectively and probably few other things that can hurt you as badly. So you want to learn how to use it very carefully and you want to keep your wits about you at all times.

All of that applies to credit cards. And if you can do that, then credit cards become like a chainsaw, an extraordinarily useful tool that won't actually leave you bleeding on the side of the road. So that's how I think about credit cards. And if you can do that, then they are distinctly, for reasons you mentioned, better than something like a debit card.

If you can't do that, you should never pick up a credit card. Just like if you can't safely operate a chainsaw, you should never pick up that particular tool. Good debt and bad debt. I think there is such a thing, but I think you need to be very, very careful. I'm not sure that a car note is good debt. I have personally never had a car loan in my life. I've never made a car payment.

What my dad taught me was every time he would go to buy a car, he paid cash. And then once he bought the car, he would start making car payments to himself, to his bank account, to his savings account.

So now instead of paying interest to a lender, he is having interest paid to himself and he would buy a new car every five years. So at the end of five years, that bank account would be large enough that he had enough money to pay cash for the new car. And then the cycle would begin again. So of course the obvious question that becomes, well,

How do you get the cash to begin with? That could be the challenging thing. And the answer to that is you drive drunkers. You drive very, very cheap, inexpensive cars that you can buy for cash.

that you can buy for very little money, and you start the cycle driving those junkers, and then you make the switch to buying a new car, if, by the way, you actually want to buy a new car. I know a lot of people who prefer driving older, beater types of cars. They're not only less expensive to buy, they're less expensive to insure, they're a whole lot less to worry about, but, well, they can be very reliable. So I don't think of car loans as being good debt.

Mortgages are probably the only thing that I would consider good debt. And then I would say, be very careful because, uh,

When you go to a real estate agent and the real estate agent talks to you about your situation, you know, what are you looking for? How much do you make? How much does your partner make? Using those kinds of numbers, how much debt do you have? The real estate agent will calculate the maximum amount of house you can afford to buy. Then you go to the lender that's going to issue the mortgage. And the lender is going to do exactly the same thing. They're going to look at your income. They're going to look at your debts. They're going to look at your credit rating.

And they are going to try to figure out the maximum amount of money they are willing to lend you. Why do they do that? The real estate agent does it, of course, because the most expensive house you buy provides the largest possible commission for the real estate agent. And there is an assumption, in fairness to real estate agents, by the way, that everybody wants the most expensive house they could possibly afford.

The lender does it for a very similar reason. It costs exactly the same amount to originate a loan

for a low amount of money as it does for a high amount of money. The only difference is the larger the amount of money, the more interest the lender is going to collect on that loan. So both of those entities are highly motivated to see you in the most expensive house you can afford. I think for the vast majority of people, that's a mistake. And the vast majority of people who do that wind up having a house that they can technically afford

but that takes away all of the other options as to how they can spend money, including on investments. So my personal approach is don't seek to buy the most house you can technically afford. Seek to buy the least house that meets your needs. Hope that helps. Great advice. Thank you so much, JL.

Let's go to the second question. So we'll go to David, my buddy David, who introduced me to the simple path to wealth and financial independence altogether.

Hi, JL. A lot of the talk is avoid lifestyle inflation along your way to your by number, calculate your annual expenses, which is based on what you're currently spending while working 40 hours a week. But there seems to be very little talk of your expenses going up a lot after you retire. And I'm not just talking about healthcare costs. I'm talking about entertainment. Suddenly you have 40 hours a week with nothing to do. And so you probably go and spend money during the day when you want it before while you were at work.

And also, you probably want to travel, including international travel. So all of this seems like your expenses could go up a lot after retirement. So how do you think about that? How do you avoid lifestyle inflation and retirement? Thanks so much. Hey, David, great question. First of all, I understand you're the one who introduced Adam to this whole financial independence path. So thank you for being out there spreading the word.

I'm not sure I entirely agree with you that your expenses necessarily go up in retirement, even though you are clearly going to want to do a lot of things like travel, maybe international travel that you weren't doing before. But a lot of other expenses, you know, like a work wardrobe and commuting and lunches out and all that sort of thing when you're working, a lot of expenses also drift away.

I've never been one for budgeting necessarily, but I've always very carefully tracked my expenses. The reason I did that was I wanted to know exactly where my money was going. I wanted to easily identify what expenses were optional if the market winds turned against me. And

were not at my back anymore. Back in the day, I loved international travel, so that was a huge expense on my expense list. But I also readily knew that that was not something I had to do. It was something that I could afford to do based on the amount of money I had invested and using the 4% guideline for withdrawing. But if things went seriously south,

Maybe I don't want to spend 4% anymore. And so that's something I would cut away along with, you know, going out to eat and all the different luxuries that we all love to indulge in. So if you keep track of those things, as long as the wind's at your back and your investments are growing in your retirement, you can keep doing them. And as long as you structure them to be within what you can afford, given your asset base, you can keep enjoying them and doing them.

As long as it lasts. But if the wind ever turns against you, now you can very easily and quickly go and say, okay, these are things that I can do without until times get better. So that's how I think about it. Again, I hope that helps. Thank you, JL. All right, let's go to another question from another David. This is David C.

Hi, Adam, JL. My name's David. I'm calling in from the UK. Just to give you a little bit of background, 45 years old. I'm around about 70% of my way to my fine number.

I've got my funds in two main accounts, largest one being a pension account, which is locked up until the age of 57, so 12 years from now. And I've got enough in there now to hit my FI number in about eight years. It's an 8% level, so quite comfortable with where that is. I've then got an account, which in the UK is called an ISO, which I think is similar to your sort of Roth, which is a post-tax fund.

fully accessible at any time. I've got circa about 200k in there. I've had a turbulent few years with work. I've had redundancies, layoffs, a few mental health challenges as well and currently in a role that I'm not really enjoying that's coming to the end of a fixed term contract in a couple of months.

My plan is to go down the barista-fi route. So I've spent quite a lot of time listening to various podcasts and getting my mind around that. Still find it a little bit daunting, if I'm honest, I think having so long with a salaried role and being used to that.

My question really is around just the logic of the calculations, really, and just wanted to bounce that off you. So I need circa 4K a month for living expenses. I do make probably around half of that with side hustles at the moment. So need to draw down circa 2K a month. So just checking my thinking, I've done a bit of a depletion calculation. So starting off with the 200K that's accessible,

and 12-year time frame. Subtracting 24k off of that figure in the first year and then assuming an 8% growth on the balance gets me to 190k starting position for the second year. And then I've continued that cycle on a spreadsheet. We all have a spreadsheet. And I'm fairly confident that should last me the 12 years. But I just wanted to check my thinking and any other advice you might have on it. Thank you.

Yeah. So David, a really interesting question. And I think it's very relevant to the conversation that Adam and I had earlier in this podcast. Hopefully you listened to that. You heard me describe what my daughter is doing in terms of her dividends from one source and making up the difference by selling some shares. But

As Adam was questioning me more closely, and some of those, like the bonds, were in a tax-advantaged account that you really don't want to touch, it becomes a little bit of a mental issue.

exercise rather than a reality in terms of your thinking in her case of I want to pull 4%. That's kind of what you're doing with your $200,000. And I think it's the right way to think about it. I obviously, I don't have a fuller picture of your financial situation. So it's hard for me to comment as to whether you will be in a good position at the end of that 12 years and you can draw on the other account or

It sounds like you will be. So it sounds to me like your thought process is right on target. It's going to be very rare, it seems to me, that people are going to retire in a situation because there are all these different government-created investment programs and some of them are locked away and some of them are tax-advantaged and what have you. It's very difficult to just cleanly draw a 4%.

from all the different sources, which is what you're faced with. So I think you kind of have to analyze it the way you've been analyzing it. So my sense of what you described is you're thinking about it correctly and you're on target. And congratulations. Sounds like you're in a very good place. Awesome. All right, let's go to the next question from Aubrey. Hi, Adam. Thank you for the amazing podcast. And JL, thank you for the amazing books.

The Simple Path to Wealth has been the single most gifted book to family, to friends, and now that I'm a financial advisor from the FI community to people that I'm helping. The one reservation I've had is that since it was written for someone starting out in life, your daughter, that someone coming to this later, like in their 40s, 50s, 60s, might feel like they got the information too late.

And I give them the book anyway, because the information itself is timeless. But do you have any advice or maybe a specific chapter to start with for people who might get the impression that they're starting late because they're not someone's daughter at the start of their life? I've also given Pathfinders because it has stories of so many people at so many different stages of life.

but specifically because the instructions in The Simple Path to Wealth are so clear. I want my friends, family, and clients to have that information, and I just want it to be received in the best way. Thank you.

Aubrey, a great question. And as I was listening to it and formulating what my response was going to be, then you went ahead and you stole my thunder. One of the things I was going to say is there's this book, Pathfinders. One of the things that's been striking to me ever since I launched The Simple Bath of Wealth back in 2016, and as you correctly point out, it was written for my daughter who was at the beginning of her life and her financial journey. One of the things that was striking to me is how

People from all over the world and at all different starting points and walks in life have taken the basic concepts and applied it to their own unique situations. So that's what made me think of Pathfinders because that's a book that's filled with a hundred stories just like that. I appreciate that you already identified that and you also give them that book because I think in many ways,

For somebody completely new to this, Pathfinders is almost a better introduction to the idea that this is something that truly anybody anywhere in the world can do, then followed up with the simple path to wealth, which describes exactly how to do it. So having said that,

This is a question I get quite a lot because there are an awful lot of people, probably most people, who don't come across my work at the very beginning like my daughter did. They come across at some later stage in their life.

A lot of times they've been investing, like I did, candidly, when I was younger, in lots of other things, individual stocks, actively managed funds, stuff they have to unwind. Sometimes, unfortunately, they're later in life and deeply in debt. They've got to unwind that. What I say to people is it's a journey. It's a journey that, depending on your savings rate, is going to take you about 10 to 15 years. And that doesn't matter where you start.

So if you start early, like my daughter, you're completing that journey in your early 30s. If you start that journey at 30, you're completing it in your early to mid 40s. If you start it at 50, et cetera, et cetera, on the way. So it doesn't really matter when you start the journey.

If you have an aggressive savings rate, which is what it's going to take, I recommend 50%. A lot of people say, that's outrageous. Nobody can possibly do that. Well, I've known countless people, including myself and my daughter, who have done it. But what's interesting to me is, by the way, I get pushback from the other direction, where people say, 50%, that's nothing. You know, I do 60%, 70%, 80%. Whether or not you can do it, or any individual can do it, is entirely up to their mindset.

in my view, but it is going to be a journey. The bigger your savings rate, the shorter that journey will be, and you will complete it at whatever point you start that much later in your life. Well, the other thing to appreciate is that it is a journey, and even if you don't technically get to being completely financially independent, you will be better off than if you hadn't started.

You start like any journey. You take the first couple of steps and you're just a little bit stronger than you were the day before. It's like going to the gym. You're not going to walk into the gym and bench press 300 pounds, but you go in and you bench press whatever you can and you're a little bit stronger the next day and the next day. It's a building process. So let's suppose your goal is to have a million dollars and at the end of your journey, you've only got half a million.

Well, is that a failure? Are you worse off because you didn't technically get to your goal? No, I would suggest you're considerably better off even though you only got partway there. One of my all-time favorite quotes comes from Leo Burnett, who was an advertising executive decades ago in the U.S. And this quote is in both editions of my book, by the way. And the quote is, if you reach for a star, you might not get one,

But you won't come up with a handful of mud either. And I think that's a great way to think about this overall. Very good. Thank you, JL. All right. Who's next? Let's see what we got. We got Lila. Hi, JL. Your simple path to wealth, which was featured on Google Talks a few years ago, was awesome. With everything that's going on, do you still recommend S&P 500 low-cost index mutual funds? What else should those of us who are FI curious know right now?

Great question. I'm glad you liked the Google talk. That was actually 2018. The last time I checked, and it's been a while, but that particular Google talk has the most views of any financially oriented Google talk of all time. I feel really good about that. I am fine with an S&P 500 broad-based index fund. I think that's a great choice. It's not

quite my favorite fund. My favorite fund is VTSAX, which is Vanguard's total stock market index fund. But the truth is, if you track those two funds over time, their performance matches very, very closely. And the reason for that is VTSAX, about 80% of it is made up of those index 500 funds. So if you're in the index 500,

or you prefer it for whatever reason, you'll get no argument from me. It is a great choice. In terms of what people on this path should be thinking about given today's circumstances, my answer to that is nothing different. The Simple Path to Wealth is designed to take us through turbulent times. It's designed to expect those turbulent times. It's something you're going to implement over decades.

I guess the thought I would leave people with, and it's something that I drum pretty heavily in the book and in my interviews, is that the market is volatile. So when the market goes down, which it does on a regular basis, that's a perfectly normal part of the process. There is nothing unusual going on. It is to be expected. It always passes, and then the market always begins its relentless march back up.

And sometimes, you know, it goes down 10%, which is considered a correction that happens on a very regular basis. Sometimes it goes down 20%, which is the threshold where they consider it a bear market. That doesn't happen as often, but it happens on a regular basis. And every now and again, the market will crash like it did during COVID.

Some people are afraid that it's about to do now. That too is a normal part of the process. And I remember when COVID happened, everybody was saying, oh, but JL, this time is different. This time's a pandemic. You know, this time people are dying. This time economies around the world are all shut down. All of which was completely true. My response to that is it's a different trigger

Because every stock market, a crash has a different trigger because they're always a surprise. You never know where that trigger is going to come from. So the trigger is always different, but it never lasts. I mean, sometimes, as we talked about earlier in this conversation, the market can have a bad decade. And the best thing you can do is take advantage of those lower prices by continuing to accumulate more and more shares and

Imagine if in the beginning of 2000 when the market went down

I think 48%, so pretty good crash. If you'd bailed out and sat on the sidelines, you would have just eaten that loss. If you continue to hold and invest it over the next 10 years, you would have added more and more shares. And when the market finally did turn around beginning in 2010 and skyrocketed as it's done for the last 15 years, you would have reaped enormous rewards for your patience.

And that's the essence of following the simple path to wealth. Just keep acquiring more and more shares. And if the market drops, consider it a gift that the market gods have given you to allow you to acquire shares at lower prices. Thank you, JL. Let's go to the next one from Kyleen. Hello.

My question is, given the high interest rates that high-yield savings accounts are currently paying, would you consider using high-yield savings accounts in lieu of bonds since high-yield savings accounts are paying almost as much interest and are FDIC-insured? Thank you. Sure. If you want to use insured savings tools, then that's fine. The reason I like bonds is that they are a little more flexible.

I try to think about how to answer this without going too deep in the weeds, but with bonds, when interest rates rise, the value of your bonds falls.

And in that case, you know, you're probably going to want to be in a regular savings account. But when interest rates fall, the value of your bonds rise. So with a bond fund, you have the opportunity for capital appreciation as well as that ongoing income. And remember, we are in this for the long term if you're on the simple path. So that's kind of why I prefer bonds.

But you're right, at the moment, high yield savings accounts, actually, I think they pay more than a total stock market index fund. So you can certainly do that. You'll just have to be a little more nimble if rates turn against you to move out of them. And if you're locked in for some extended period of time, of course, that will be more difficult. But there's nothing wrong with a FDI insured savings tool, whether it's a savings account or a CD or whatever it might be.

Very good. And let's go to the last question from another friend of mine, Rishan. Hi, Adam. I'm Rishan. I am an entrepreneur and I also happen to be one of your best friends. So I'm taking full advantage of being able to ask this question. I know that I can...

back into whatever my number is that I need to hit in order to feel like I am ready to retire. And that's going to be based on what I want my lifestyle to look like as I'm heading into retirement. How do I go about thinking about what do I want out of my retirement?

There's just so many different possibilities that I could go for. I don't even really know. Maybe the things that I want now are not the things that I'm going to want when I'm 50 or 60 or what have you. And so what are the guidelines or frameworks that I can use to think about how to prepare for whatever inevitabilities there are as I'm thinking about my future? So I am the absolute worst person to ask that question of.

Because when I retired, I had not given a single thought to what I was going to do in my retirement. I think it's probably a good idea to give a lot of thought to what you want to do and what inspires you.

I think you're absolutely right. I don't know how old he is, but it sounds like he's probably closer to your age. So almost inevitably, when he's 50 or 60, he's going to want different things than he wants today. But I don't think you have to figure that out now. I think you figure it out as you go along. The one comment I will make is I think it's worth thinking about

what age you are and what things both appeal to you at a given age and you are physically capable of doing at a given age. So I'll give you a great example. In my 20s, I did a fair amount of backpacking out in the backcountry. I did a fair amount of bicycle touring, even though that was kind of an unheard thing back in the 70s when I was doing it. I'm not physically capable of doing either one of those things, and nor am I willing to sleep on the ground anymore.

Now I want to stay in luxury hotels. So I'm glad that I did those things in my 20s. I'm glad I didn't say to myself, I'm going to wait until I'm retired to do those things. When you're retired, you may not have the physical ability or interest to do it. By the same token, when I was in my 20s, I not only couldn't afford to stay in luxury hotels, I really didn't care about staying in luxury hotels.

Every season has its things, right? So everything in its own time. I guess my only advice I would give is to think about things that you can do, assuming he's in his 30s, for instance, things that you can do now in your 30s that appeal to you.

And then if there are things like, say, a river cruise that you can easily do when you're older, maybe that's something that you set aside for when you're older. Maybe that's not the best thing to do now. The more physically challenging things might be the better thing to do now when you have your maximum physical health and abilities.

Great advice, JL. And yeah, I'll just add a comment as well, since this is something that I focus on a lot. I'm a big believer in not waiting to reach some arbitrary number to start living the life that you want. And so I would highly recommend starting to think bigger about what's possible for your life and just start living that life now. Because if you think you're going to want to do something after you reach financial independence, whenever you do that, whether it's in your 50s or it's in your 30s,

You need to actually try that and see if you like it. You know, I have a free envisioning exercise that you can download at mindfulfire.org slash start. That's a great exercise to get you thinking bigger about your life, what you might want. And then you can use the envisioning practices that I teach on the podcast and in my group coaching program,

to actually start planting seeds and living that life now. That way you don't need to wait and you figure it out along the way. But I love the advice that you gave, JL, about doing what you're physically able to do. I think that was a big takeaway for me from another great book called Die With Zero, where he says like, you can't hike the Inca Trail when you're 75 years old, most likely. So do that now and prioritize spending that money now

to do that activity so that you can have what he calls the memory dividends later on. But I'm going to hand it over to you, Chris. I know you have a question for JL. I'm going to let you ask that question and then we'll wrap up. Okay. Sounds good. Thanks, Adam.

Okay, JL, last question of the day. Okay. For many of us in the FI community, reading The Simple Path to Wealth for the first time was a major inflection point in our lives, at least in a financial sense. It was a light bulb moment, realizing that investing can actually be easy, virtually anyone could do it, and that the ensuing outcome can lead to extraordinary results over time. So thinking about your own life,

Have you experienced any inflection points or a big aha moment where something hits you like lightning and all of a sudden your life changes? And this could be related to money or just any other area of your life. Wow, what a question. Probably when I was very young, I came across, very fortunately, a book called How I Found Freedom in an Unfree World.

written by a guy named Harry Brown. I think it might be out of print, but I think it's worth seeking out because, as I mentioned earlier, I was kind of wandering in the wilderness when I was on this path. In my circle, of course, there was no internet. There was no easy way to connect to people who might share similar ideas, but were in vastly different locations.

Nobody in my immediate circle, both of friends and business acquaintances, was doing anything remotely like saving 50% of their income like I was doing.

I was completely out of step with the rest of the world around me. I was okay with that because that's what felt right to me. But it was always a little bit stressful because I was so profoundly out of step with the rest of the world. And this applies to other things in my life. One of the things that this book, How I Found Freedom in an Unfree World, opened my eyes to was that that was a good thing.

Being out of step with the rest of the world was not only acceptable and you could do it, but it was a good thing. That was an eye-opener for me. When everybody else is going one way and you're going the other way, you're a better person than I if you're thinking at that point they're all wrong and I'm right. At least I was questioning, what am I missing? Fortunately, I kept going the way I wanted to go because it paid huge dividends in my life. That book,

was a great reinforcement that it was okay to do what I was doing and to think the way I was thinking. So maybe those are the kinds of things. And I guess the other epiphany I had was when I finally accepted the value of indexing. As I alluded to earlier, it took me an embarrassing long time to get there.

Because I was so ingrained in being a stock picker and I was reasonably good at it. It's just that indexing would have given better results for a whole lot less effort. So I would have been much better off if I'd embraced it sooner. But ultimately, I got there. And maybe if I hadn't wandered in the wilderness doing all those other things the way I did, I would not have fully appreciated the power of indexing and wouldn't have been able to write a book like The Simple Path to Well.

Very good. Thank you so much, JL, for answering all the questions from our audience. I think that was a lot of fun. I want to do more of that. So again, if you're listening and you want to send in a question for me or a future guest, you can do that at mindfulfire.org slash VM or mindfulfire.org slash voicemail. JL, where can people find your new book, find the new version of The Simple Path to Wealth and connect with all that you're doing in the world?

Well, so if all goes according to plan, you should find it very easy to find the new edition of The Simple Path to Wealth. It should be in bookstores. Obviously, it's available on Amazon. You can already pre-order it. I think it becomes available on May 20th. The best way to find me is to go to the blog, which is jlcollinsnh.com, and

You can find me on X. You can find me on Facebook. My new publisher is putting out a newsletter based around following the simple path to wealth. So I kind of now have a team doing some really interesting things. And, you know, you'll be able to sign up for that. You'll find more of me than you probably care to. Well, thank you so much, JL, for being here, for sharing your wisdom with me, Chris, and the audience. It was an absolute pleasure. And Chris, thank you to you for being here as well.

I thoroughly enjoyed it. Great questions. I appreciate that. Thanks for joining me on today's episode of the Mindful Fire podcast. If you enjoyed today's episode, I invite you to hit subscribe wherever you're listening to this. This just lets the platforms know you're getting value from the episodes and you want to be here when I release additional content. If you're ready to start your Mindful Fire journey, go to mindfulfire.org and download my free envisioning guide.

In just 10 minutes, this guide will help you craft a clear and inspiring vision for your life. Again, you can download it for free at mindfulfire.org. Thanks again, and I'll catch you next time on the Mindful Fire Podcast.